An In-Depth Analysis Of Utilitarianism

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Utilitarianism is a well-known and influential moral theory that considers a choice to be the most ethical when it produces the greatest good for most people. This maximization of happiness is the determining factor in whether an action should be considered ethical. Utilitarianism is a form of consequentialism: that the right action is understood entirely by consequences produced (Driver, 2014).

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Morality isn’t judged by set of ethical standards; There are no innate rights and wrongs (Jones, 2013). Actions are deemed wrong when they cause more harm, and right when they maximize happiness. There are two different schools of thought regarding Utilitarianism, that distinguish between individual actions and types of actions. Act utilitarianism is concerned with the effects of specific individual actions whereas rule utilitarianism focuses more on the effects of types of actions such as bribery or theft (Nathanson, n.d.). While different in focus, both agree on the basic tenants of utilitarianism.

Most of the early teachings of Utilitarianism is owed to Jeremy Bentham and John Stuart Mill. Their theory has had a major impact both on philosophical work in moral theory and on approaches to economic, political, and social policy (Nathanson, n.d.). Utilitarianism adopts a teleological approach to ethics, which argues that actions are judged by their consequences. Therefore, actions are not inherently good or bad. They are assigned a moral value by the result (Sheppard, 2011).

The practical application of utilitarianist teachings is both widespread and controversial. One of the most fundamental aspects of Utilitarianism is how it applies to political groups and public policies as well as the behavior of organizations and corporate entities (Nathanson, n.d.). Bentham, one of the foremost utilitarianisms, thought that it was important to focus on discovering which actions and policies maximize the well-being of a specific group. And today, this is a common application of the theory. It allows us to view actions of countries, companies and individuals from a micro and macroeconomic level, and evaluate the morality of their decision and actions.

One Nation Under Walmart

A recognized brand by virtually everyone, Walmart has firmly established its place in the American zeitgeist. If Walmart were a country it would be one of the top thirty economies in the world (Snyder, 2015). On the surface, the story of Walmart as the embodiment of the American Dream and an example of the possibilities that capitalism can provide. It is a storybook fairytale; a family from Bentonville, Arkansas pulling themselves up by their bootstraps and creating one of the largest companies in the world. It is hard to not be fascinated and enthralled by this story. In a fascinating deep dive into the lore and impact of this success, One Nation Under Walmart exposes the high social costs that accompany Walmart’s super low prices. The scale at which Walmart now operates is not going unnoticed, and journalist Terry McNarry shows that communities are starting to take notice and aren’t going to just roll-over and acquiesce to the Big Box Brand.

The fact that Walmart offers such lower prices at an immense scale is not a result of sheer luck. Ultimately, there is a point at which what Walmart is doing to accomplish these feats must be critiqued and analyzed. While it may be argued that the overall impact of being able to offer low prices is the best thing for communities and people not only in the United States but around the world, the answer to this is not a simple yes or no. Is Walmart’s path to market domination ethical? Through the lens of a utilitarianist, it is important to analyze the benefits and the costs of Walmart’s domination.

With a Utilitarian perspective in mind, by taking only the fact that Walmart’s strategies allow consumers to purchase items a considerable discount, then the answer to Walmart’s ethical dilemma may seem fairly clear: while its low-cost approach and aggressive growth strategy can put a strain on local communities, and have some negative effects, one must look at the end result; low prices for everyone that allow less-advantage families to purchase necessities. This is clearly a positive result, as a utilitarianist would view this as justification for deeming Walmart’s approach as ethical. However, the multitude of social problems caused by Walmart’s dominance bring to light a company with a strategy that a utilitarianist would consider unethical.

The social costs of Walmart’s low prices are ubiquitous and highlight that low prices wreak havoc for poorer communities and have notable labor and environmental sustainability problems. While low costs may help poorer communities purchase necessary items, doing so can further suppress the communities that the low prices are supposed to help. In turn, the benefit of low prices is only truly realized by those with moderate to high wealth. According to study by the Democratic Staff of the U.S. Committee on Education and the Workforce, Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing (1) (O’Conner, 2014). “It found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers.” (1) (O’Conner, 2014).

These statistics are immediately concerning. If being able to offer low prices causes a disproportionate amount of people to suffer, then what is the true benefit? The biggest issue is the sheer size of Walmart. To fully understand the impact of Walmart, consider that In the U.S. alone, a full tenth of the country’s retail workers are employed by Walmart, and they make an average of $8.81 an hour (2) (Smiley, 2014). This wage isn’t enough to live a quality life. It is fair to point out that Walmart does provide an astronomical amount of jobs, with a current US workforce at about 1.5 million (14). But taking into account that Costco, one of Walmart’s biggest rivals, pays its workers an average of $17 per hour, these statistics aren’t as impressive (Chandorkar, 2018).
Walmart is a sprawling, unrivaled enterprise that wields considerable power. And this largely unchecked power isn’t easy to challenge.

Taking the benefits of super low prices at face value may seem like a done deal; everyone benefits. Therefore, Walmart’s actions would be considered ethical since low prices help everybody. However, it is important to analyze all the consequences and not just the easily noticeable and positive consequences. Low prices are simply one result of Walmart’s operations. However, assuming this is the only one that matters is not right. In addition to disenfranchising poorer communities, the hunt for the lowest prices around is having negative effects when it comes to labor and environmental sustainability (3). There is no arguing that Walmart offers the lowest prices around, and ones that are impossible for other competitors to compete with. This fosters the environment where there are incentives to cut corners, rather than establish high standards, in order to maintain a certain level of business (3). In addition, the company has been accused of unfair labor practices. Even though it publicly touts its commitment to support more small and midsize operations, the truth says a different story; one whose operations foster corporate consolidation instead (3).

At the end of the day, Walmart isn’t concerned with employing practices that benefit as many people as possible. Utilitarianism permits actions that maximize happiness, and while Walmart can offer low prices, they do so at an enormous cost that only ends up hurting more. Therefore, Walmart’s actions in their pursuit for the lowest prices is unethical.

Nestle and Advertising

The advertising industry is not without its fair share of concerns. One particular company of concern is Nestle and its promotion of baby formula as discussed in an ethical case study titled Nettle and Advertising by Chris Ragg. Ragg explores the cynical and exploitive nature of Nestle’s advertising prices to try and get customer, especially poorer women in developing countries, to purchase baby formula instead of breastfeeding. This analysis exposes a company acting not on behalf of what is good for the most people, but what is good for the company and only them.
The Nestle corporation has been producing baby formula since 1866 and has therefore had a long-lasting impact on the market for baby formula. In the 1960s and 1970s, the aggressively marketed their baby formula products throughout the world. They conveniently shared only the benefits of the formula and neglected to mention any of the potential drawbacks of adopting formula over traditional breastfeeding methods. Their marketing campaign led many to believe that the formula is a one-for-one alternative and, as a result, had a decreased inclination to breastfeed.

At face value, this may not seem like a problem at all. Nestle was simply marketing their product heavily to increase sales. However, the company did so out of greed to drive profits. They promoted formula as an almost equal replacement for breastmilk, which virtually all doctors advise against. In most cases, doctors will advise mothers to breastfeed. Evidence has shown that Babies that are breastfed don’t need any additional food or drinks for the first six months of their life and have a reduced risk of diabetes (Allhoff & Vaidya, 2008). And this is even more true for those in developing countries, where water is commonly contaminated. When baby formula is used instead, the contaminated water is mixed with the formula, which can cause diarrhea, dehydration and malnutrition and even death (Allhoff & Vaidya, 2008).

Armed with this knowledge, Nestle ignored these implications and chose to target those that were less-informed and more likely to believe Nestle and switch to formula. Although not uncommon, Nestle’s marketing promotions demonstrate a clear desire to put success ahead of anything else. They acted purely in their own self-interest, commonly referred to in philosophy as ethical egoism. Ethical egoism states that morality requires people to promote their own interest (Nathanson, n.d.). However, Utilitarianists reject this concept, as decisions that promote ethical egoism are a false morality of lack morality altogether. They acted purely out of self-interest, with no consideration to, as Jeremy Bentham famously said, the greatest happiness for the greatest number (Nathanson, n.d.). The maximization principle of Utilitarianism is entirely violated here. To benefit the company’s top and bottom line, Nestle chose to disregard the negative consequences of having capable mothers switch to formula, even when faced with the disproportionate impact it can have on mothers in developing countries. Nestle’s actions have real consequences. According to UNICEF and the World Health Organization, approximately 1. 5 million infants die each year from bottle-feeding (Allhoff & Vaidya, 2008). Nestle’s actions make them complicit in this. In addition, Nestle has repeatedly violated the International Code of Marketing of Breast-milk Substitutes, of which it promised to abide by. Clearly, doing what’s best for mother’s is not in the interest of Nestle, simply because it isn’t in the best interest for their top and bottom line. As such, Nestle’s actions can be clearly labeled as unethical and immoral.

Universal basic income

Am emerging topic that has gained traction in the last few years is the idea of a giving every citizen a monetary grant without a means test or work requirement, commonly known as Universal basic. Every citizen will receive a fixed amount on a predetermined time frame, whether that be monthly, weekly or annually. The idea of giving free money to citizens is as radical proposition as it is attractive. The basis behind UBI is that it is a more cost-efficient replacement for current welfare systems as a method of alleviating poverty (Tse, 2016). Arguments for UBI stress that is especially benefits the poor working class, who may struggle daily to cover basic living expenses, and in doing so, helps redistribute wealth.

The implications of Universal basic income are widespread, and to understand this concept from a utilitarian point of view it is important to analyze how such a policy maximizes happiness and promotes utility. A central tenant of basic income is its beneficial impact on the redistribution of wealth. While doing so may infringe on some individual rights such money, this infringement yields happiness for the majority (Tse, 2016). Poverty is not just a problem for those that experience it. It is a problem that affects everyone. According to the World Bank, close to half of the worlds population live on less than $5.50 a say (World Bank, 2011). This amount is not enough to sustain an adequate lifestyle. Even more staggering is that about 10% currently live on less than $1.90 a day, which the World bank constitutes extreme poverty (World Bank, 2018). Therefore, a program that attempts to tackle a problem that affects most of the population aligns with utilitarian ideals.

In addition, Universal basic income also maximizes happiness by offering those that are displaced from a job a sense of security. Unemployment is distressful and a cause of significant unhappiness. Whether unemployed due to physical ailments, or lack of skills, the impact isn’t any different. Those that don’t have the ability to sustain themselves will be fundamentally unhappier. Therefore, not only can basic income help provide a sense of security for these people, in doing so it maximizes utility in the process. It also helps those that are above the poverty line, but by only a few dollars and as a result still essentially live in poverty but are ineligible for government benefits. As a result, universal basic income is morally permissible.

Oracle versus PeopleSoft

Oracle is one of the largest technology and software companies in the world, with immense power and leverage in the industry. In an article titled, Oracle versus PeopleSoft Barbarians in the Valley offers a glimpse into the world of big-tech companies vying for complete control of the market.

In the early 2000’s Oracle offered a bid to takeover Peoplesoft, one of its biggest competitors. This bid became instantly fraught with bad blood and divisive rhetoric. The media often described Oracle’s actions as a hostile takeover. Peoplesoft consistently turned down Oracle’s bid, arguing that Oracle intentions were to discontinue PeopleSoft’s products, which would damage the company and that Oracles price per share offer was too low.

Oracle was, and still is, a dominant player in the business software market. At the time of the proposed takeover, the market was occupied by only a few major players, SAP, Oracle, PeopleSoft and JDEdwards, which merged with PeopleSoft shortly before Oracle expressed intent to take over PeopleSoft. With an oligopolistic market structure, having the 4 big players reduced to two immediately brought antitrust concerns. When a market that is already characterized by only a few players setting the price for goods and services, the consumer and the market have much less control over price. With two main players, the industry is only one step of way from becoming a full monopolistic market. A Monopoly tends to not be beneficial for consumers, as prices are not set by any price mechanism. Prices are simply declared by the controlling entity. And the price that is declared is non-negotiable and there is nothing consumers can say or do; they simply have to pay it. And no one can compete against the monopoly. If they try, they are either told they are not allowed to or eliminated (Yang, 2018). Consumers are at the mercy of the organization in power, with little to no recourse over unfair prices or practices. This sets a dangerous precedent and tears down the mechanisms necessary for a free market to operate. A free market is one where prices are more fairly determined. Without the fairness, those that are most disadvantaged will be disproportionately affected. The benefit of a market controlled by one or two dominant players is extended only to those that are fortunate to be in power.

For example, if Oracle and SAP are left as the last two, there is much less incentive for the two companies to diversify product offerings and offer the best deal for consumers. Competition is good for consumers as it forces companies to compete on price, which usually results in a reduction in price. Without this mechanism, prices can be artificially increased with little recourse. Customers will have no choice but to buy an SAP product or an Oracle product. In this instance, the maximization of the most people is nonexistent. It could be more aptly described as the minimization of happiness. In contrast to the ideals of utilitarianism, Oracle’s takeover is most appropriately considered unethical and should be disallowed under antitrust rules.

Twitter has a women problem

Sex discrimination in the workplace comes in all forms, some overt and some must less obvious. One particular area of concern is the lack of women occupying executive roles in many of the large technology companies. This issue is further explored in an interesting piece by Laura Bacon titled Twitter has a Women Problem. This piece examines the lack of equality between men and women in the workplace.

The tech industry is heavily male dominated, and this comes as a surprise to nobody. Only about a quarter of Fortune 500 companies have even one woman on their executive teams, and women CEOs account for an even smaller percentage of these companies (Bacon, 2013). Things bring up an important point: Are technology companies like Twitter unethical in contributing to the lack of women in executive roles? The answer is not cut and dry. Instead, through the lens of a Utilitarian, and against the common thinking, such practices are in fact not unethical, even though it may be problematic. The goal of a business should be to hire the most qualified individuals to fill open positions, and not include gender as a qualifying factor. Focusing on hiring more women goes against this and creates a disadvantage, conflicting with the central theme of Utilitarianism of maximizing happiness and promoting utility for the greatest number of people. While more women should be encouraged to come forward and apply for these positions, hiring practices should be fair and inclusive of all genders, races and to not discriminate against any particular trait other than qualifications. Doing so creates a level playing field where both men and women have a equal chance. This doesn’t disadvantage one particular group over another.

It is important to note that if the cause of the lack of women in power in technology companies is purposeful, this goes against utilitarian ideals and is unethical. It is important to draw this line. If a company does not employ fair hiring practices, they are acting unethically.

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